The City of Richmond is proposing to mandate mixed-tenure rental housing in future residential developments in a bid to improve affordability.
In a report to city council today, city staff have recommended requiring apartment projects in Richmond City Centre with over 60 units to set aside 25% of the residential floor area for rental units, including 10% as market rental housing and 15% for low-end of market rental housing (LEMR).
Of notable mention, the future Lansdowne Centre redevelopment within the city centre would be required to follow this inclusive rental requirement, which will have about 4.5 million sq ft of residential floor area for up to 4,500 homes for as many as 10,000 people.
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For multi-family developments of over 60 units outside of the city centre boundaries, there would be a 20% requirement for rentals, with 10% as market rental housing and 10% as LEMR.
Both scenarios based on location would also provide a very nominal density increase of 0.1 FAR.
There will also be a new community amenity contribution (CAC) requirement for townhouse developments with five or more units and apartment developments with between five and 60 units. The CAC is recommended to be equivalent to 10% of the residential floor area constructed as market rental housing, with this revenue collected by the city going towards affordable housing projects for low- and middle-income households.
In their analysis on determining the financial feasibility of rental housing built by private developers, city staff determined that the construction of 100% or even 50% market rental housing is unfeasible, unless the land is provided at a significant discount. Furthermore, 100% market rental housing in high-density concrete construction is not financially feasible, even if the land is completely free.
This direction of mandating rental housing in future residential developments was first hinted during the city’s 2019 public consultation on inclusive rental housing. In recent years, cities such as Burnaby and New Westminster also passed their own policies requiring a proportion of new residential floor area be dedicated for rentals.
The municipal government estimates there are about 7,700 purpose-built rental homes and 13,800 secondary rental homes (condos, townhouses, and houses rented by owners) in Richmond. Census data shows about 30% of new development is used for the secondary rental market upon completion.
Richmond’s average rental vacancy rate between 2015 and 2019 was 0.7%, and private market apartments were at 1.9% in October 2020. These rates are far outside the 3% to 5% range that is considered a healthy vacancy.
It is also estimated that Richmond will need at least 190 additional market rental homes annually to accommodate households with an annual income greater than $70,0000.
Separately, at a later date, city council will consider rental-only zoning to preserve and protect existing purpose-built, 100% rental buildings. It is also currently contemplating banning strata corporations from limiting the age of people living in a unit.